While the second-largest crypto asset by market capitalization, ethereum, has risen 27% against the US dollar in the past two weeks, network median and average gas fees have risen by more than 50%. On the first day of 2023, the average fee to spend ether was around $2.93 per transfer, but today the average cost is 54% higher at $4.52 per transfer.
Rise in Ethereum Value Leads to Higher On-Chain Transaction Costs
Sending Ethereum (ETH) it is getting more expensive as the value of the crypto asset has risen sharply in the last 14 days. At the time of writing, ether is trading at $1,542 per unit, after peaking at $1,606 per unit during the same 24-hour period on January 18, 2023.
As the value of ethereum in US dollars increased, so did the cost of moving ether and the myriad of ERC20 tokens. Data from bitinfocharts.com indicates that on January 1, 2023, the average ether gas fee was $2.93 per transfer. 18 days later, the average fee to send ethereum is 54% higher at $4.52 per transaction.
Bitinfocharts.com’s midsize ethereum fee chart highlights a similar pattern. 18 days ago, the first day of 2023, bitinfocharts.com’s table of median ether fees showed that the cost was around $1.06 per transfer to send ethereum.
On Wednesday, the same chart showed the cost rising to 0.0013 ETH per transfer or about $1.96 using current ether exchange rates. That means the median ethereum fee has risen 84% since January 1. Also, while gas metering is generally estimated at a much lower rate, etherscan.io’s “Gas Tracker” also shows an increase since the beginning of the year.
On that day, the web portal rate tracker indicates that the high priority ether gas rate was around $0.30 per transfer or 20 gwei. 18 days later, a high priority fee is still 20 gwei or $1.14 per ETH transaction, which is an increase of around 280%. On January 1, the cost of transacting with Opensea was approximately $1.12 per transaction and today it is $3.99.
A trade on a decentralized exchange (dex) used to cost $2.87 and now it costs as much as $10.28 to trade on a dex like Uniswap. Send an ERC20 token as USDT and USDC would cost a sender about $0.84 per transaction, and today it costs about $3.02 to send an ERC20.
In addition, the cost of layer two (L2) transactions has also increased. Three days ago, on January 15, 2023, Bitcoin.com News reported on the increase in Arbitrum and Optimism transactions. On that day, a transfer on the Arbitrum network cost around $0.101 per transfer, and the current fee is around $0.188 per transfer, according to data from Dune Analytics.
Similarly, Optimism’s network transaction costs were $0.1410 per transfer three days ago, and on January 18, the cost of moving coins on Optimism’s L2 chain is $0.3039 per transaction. The rise of the highest ether gas fees in recent times has broken the record for long months of low fees on the Ethereum network.
What impact do you think rising gas fees will have on the Ethereum network and its users? Share your thoughts in the comments below.
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